Scottish Mortgage Trust share price is firing on all cylinders as some of its biggest bets start to pay off. SMT jumped to a record high this week, completing a major comeback that started in May 2023 when it bottomed at 604p. This surge may accelerate after forming a cup-and-handle pattern ahead of the SpaceX IPO.
Scottish Mortgage Trust is a top AI winner
Baillie Gifford’s, Scottish Mortgage Trust, is doing well, helped by its large investments in the artificial intelligence. It holds large stakes in some of the top companies thriving in the industry.
For example, its biggest holding is SpaceX, the company set to go public in June this year. While SpaceX is a space company, it is also a large player in the AI sector through its xAI merger.
Scottish Mortgage has held SpaceX in its portfolio for many years, a situation that will pay off once it goes public. Analysts expect that the company will be valued at over $1.5 trillion in its IPO. Polymarket traders predict that the company’s valuation will grow to over $2 trillion shortly after going public.
The fund also holds other companies that have a large stake in the AI industry. For example, it holds Amazon, the biggest e-commerce and cloud computing company globally. Amazon has invested $8 billion in Anthropic, meaning that its return is already substantial.
Anthropic recently raised funds at a $900 billion valuation, and chances are that it will be the fastest company to hit a $1 trillion valuation. In the future, it may even become the biggest company in the world, helped by its strong revenuegrowth.
In addition to its exposure through Amazon, Scottish Mortgage holds a direct stake in Anthropic, which accounts for 2.6% of its portfolio.
The fund also has stakes in companies that are powering the AI industry. For example, it has a large stake in Taiwan Semiconductor, which is the top chip manufacturer. It also has a stake in ASML, the only company in the world that makes machines used to manufacturing of chips.
Scottish Mortgage also has a large stake in Stripe, one of the top cash processors in the world. Its recent fundraising gave it a valuation of over $150 billion. Its IPO, which will likely happen in the next few years, will likely value it at over $200 billion. Its other top investments are in companies like Mercadolibre, Meta Platforms, Shopify, and Wise.
SMT share price has formed a cup & handle pattern
Scottish Mortgage Trust stock chart | Source: TradingView
Technicals suggest that the Scottish Mortgage Trust stock price has more gains to go. It has remained above the 50-week and 200-week moving averages after forming a golden cross pattern in July 2024.
Most importantly, it has been forming a cup-and-handle pattern, which is a common continuation sign. It has now moved to the cup’s upper side.
This cup has a depth of about 63%. Measuring the same distance from the cup’s upper side gives it a target of 2,475p, which is about 63% above the current level.
The only caveat is that this forecast is based on the weekly chart. As such, it may take months or even years for the target to be reached. For example, its lower side of the cup happened in May 2023, meaning that it has taken three years to get to its upper side.
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